October 29, 2013

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5 Real Reasons Why CEOs Cut Your Marketing Budget

by Tom De Baere

Digital disruptions are causing marketers to rethink their position within the company. The increasing expectations from customers, social media, mobile and globalization are giving organizations great opportunities, to those who are willing to change.

Many struggle with this change. Few have been able to position themselves to capture the real business benefits.

I think this change starts with strong leadership and a change of mindset. If you do not have that leadership and mindset, your CEO will keep cutting your budget. Here are 5 Misconceptions about Marketing, understood by those that will make the change, neglected by those of the past.

Budget cuts are yours by those who neglect.

1. You think marketing is important

Let me disappoint you. If you keep seeing marketing as a department, or an activity, your are missing the point.

Let me explain : the C-suite often understands the necessity of transforming all departments to embrace social and digital interaction, to focus on customers as individuals and enterprise wide transparency. Still organization struggle to integrate divisions, align the C-suite or reengineer the customer-facing process, along a common digital strategy.

Today marketers need to expand their territory beyond marketing. Marketers today must lead a bigger transformation, to shift away from outbound to inbound, from being egocentric to being meaningful, from offline to online, from inside-outside innovation to customer collaboration.

Marketers must break down the departmental silo’s using evangelization, training, re-organization and new processes, and bring in a broad new culture integration of content, digital and social.

Only when all departments understand that digital must be part of the core business, you will be able to focus on customers as individuals, be transparent ‘enterprise wide’, and embrace social and digital interactions.

2. You think marketing should generate leads

Wrong. If you think this, you see customers as bags of money. When you do marketing this way, each time you generate a lead, you think “my money is in your pockets”. Money is what you are after. And customers that know this, won’t trust you. The’ll see right through you.

In the lurking age of context, companies today hire digital managers, conversation managers and social media engagement managers. These managers work within a marketing or e-commerce department, within a business unit, and on some occasion are seen as a strategic function that lead the digital transformation strategy of the company.

But in almost no occasions, customers are seen as the most valuable asset a company has. Companies that want to be successful and survive in a world where advertising, content and social networking will become increasingly difficult, those companies must adopt a new culture where helping customers is separated from what you sell to a customer.

You have your products and your services. And they are great. But in a globalizing world, great products and services are the Olympic minimum. The difference will be made in how you help your customers beyond your products and services.

Marketers of tomorrow can combine revenue generation, with a companywide transformation towards being relevant to customers beyond products and services.

3. You think you need people in your team that do digital and social

If you think that, sorry to hear that. Digital and social is not something you do. It’s something you are, as a company. Everyone in the company must understand the “digital and social storms” happening around them. The explosion in the number of social and communication channels, the abundance of content, and the rise of social networking have changed the buying behavior of its customers. Traditional methods to manage customer experiences fail to address new digital customer needs.

Customers buy different and expect different experiences. With so many customer touchpoints towards your company, marketing cannot possibly be seen as the social or digital department. It has to become natural for all employees to take on a new responsibility of sharing on social sites, blogging, text chats and the like.

Marketers of tomorrow know they need to lead this change. They formulate the vision of the digital future and the role of the company, develop programs to educate and train employees, coordinate the cross-silo communication and add new skills.

4. You think lower budget means less marketing

You are missing the point. Why do you think your budgets are shrinking ? It is probably not because your CEO is ravingly enthusiastic about your results. And even when shrinking budgets are your part, it doesn’t mean you can do less.

In todays digitally connected and socially networked world, it is not about how much marketing money you have to spend.

The biggest cost in your budget are event marketing and advertising. And these type of marketing tactics are becoming less effective:

Your customers have less budget and time to travel to these events. And with the right content for your buyers, there is less need to travel to these trade-shows. Give them no reason anymore to go to trade-shows.

Instead, rebalance some of that money towards creating content that guides your customers through the buying cycle you offer them.
Rebalance towards systems that automate what can be automated, so your people can focus on what is really important.

If you do that, you’ll also be leading the forward thinking to transform not only the customer-facing processes, but also to digitalize your operational processes and get digital in the core of what you do.

5. You think content marketing is the answer

And the answer to create ever better content to break through the clutter is not something many companies can do. The marketing of “be amazing” cannot be sustained.

I believe it is more efficient to be useful to customers. That type of marketing is far more effective than optimizing your conversion using the classic tricks of image placement, word choice and lead nurturing techniques.

If you get all of this, and make that change happen, your CEO won’t be cutting marketing budgets. They’ll invest. Heavily.

About this blog

This blog is not about me. It is about modern marketing in todays digital world. It shares down to earth and practical tips on how to build marketing strategies, plan and execute them, as well as my own experiences on what I think differentiating marketing should be.

Opinions on this blog are mine.

About Tom De Baere

Everybody has a past, and everybody has experience. For me, my experience is 15 years in sales & marketing, in which I have developed a true passion for B2B marketing & communication.

Today I am managing partner in a company called Invisible Puppy, a digital agency specialized in helping companies to create marketing that people actually want.